The government is considering releasing tax funds to the Palestinian Authority,
which Israel has been holding since the PA joined the UN cultural agency last
month, Prime Minister Binyamin Netanyahu told the Knesset Foreign Affairs and
Defense Committee on Monday.

“Israel will examine this possibility, in
light of the current calm situation,” Netanyahu said, adding that the PA seems
to have slowed its unilateral steps toward statehood. Should they renew those
steps, the government will freeze funding again, he said.

“We’re not interested
in leading the PA to collapse,” the source said.

Also on Monday, Defense
Minister Ehud Barak spoke out in favor of releasing the funds to the PA, saying
that “the money belongs to them, we just collect it.”

In reference to the
expectation that the Palestinians would bring statehood to a UN vote in
September, Netanyahu said: “We successfully avoided the [negative] forecasts on
the international stage. We see things quieting down on the Palestinian side –
they have decided to stop these steps,” he added. “We didn’t need a veto in the
UN Security Council. It’s in the Palestinian interest to stop.

They know
that their actions have a price.”

According to Netanyahu, the PA does not
plan to continue in its attempts to join UN agencies or bring statehood to a
vote in the UN General Assembly.

In addition, the prime minister said
that the PA’s “union with Hamas is ceremonial, and does not have concrete
results.”

MK Amir Peretz (Labor) told Netanyahu that “it wouldn’t hurt
the situation in the Middle East if there was a picture of you and [PA President
Mahmoud] Abbas together.”

“There already is a picture like that, by
Benetton, and I don’t think it helped,” Netanyahu joked, referring to an
advertisement that appears to depict him and the PA leader kissing.

“The
real goal, as far as we’re concerned, is negotiation without preconditions,” the
prime minister added.

“The reason Abbas did not seek direct negotiations
is that he understood that he could gain more by avoiding them, without paying a
price.”

However, he explained, “the demand to freeze construction [in the
West Bank and east Jerusalem] has become a central point, uprooting our ability
to begin talks.”

Netanyahu also said that the unity deal between the PA
and Hamas is not of major concern, because it is mainly “ceremonial and does not
have practical results.”

In response to calls from Labor MKs to release
jailed Fatah-Tanzim leader Marwan Barghouti, the prime minister said he’s “not
excited” about the idea.

“Barghouti could take the PA to other
directions, as a part of his desire to compete with Hamas,” Netanyahu said.
“Just because he has leadership abilities, doesn’t mean he should be let out [of
prison].”

Netanyahu also addressed events in the Middle East, saying that
“the whole region is being flooded by an Islamic wave. At this stage, it’s hard
to say when the region will stabilize,” he continued. “Without the development
of political and economic freedom for the individual, it’s unclear that current
changes will satisfy the citizens [demonstrating] on the streets.”

The
prime minister said that there is a degree of uncertainty as to the fate of
weapons in states that are facing upheaval, pointing out that arms from Libya
have reached Sinai and Gaza.

“We hope and are taking action to protect
and stabilize the peace treaty with Egypt,” Netanyahu explained. “I do not
expect that we will have the same intimate relations we had in the past with the
new leader. We cannot base our security on a peace treaty alone, because
treaties can unravel.”

At the same time, the prime minister emphasized
that there is an “interest in keeping Jordan a strong state.”

“Jordan is
our partner in peace. Its importance is clear to all of us,” he
added.

Netanyahu explained that “security threats on Israel are
increasing,” which in turn “puts a lot of pressure on the defense budget. We
must have economic responsibility.

I have no doubt that we will have to
make important decisions on the defense budget,” he added.

Some of the
defense expenses that Netanyahu mentioned included additional Iron Dome
batteries and building the security barrier along the southern
border.

Netanyahu then asked Knesset Foreign Affairs and Defense
Committee Chairman Shaul Mofaz (Kadima) to stop delaying NIS 600 million in
defense-budget funds, which he said would mostly be dedicated to the barrier’s
construction.

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